What is your assessment of the role of small – and medium-sized enterprises?

Small – and medium-sized enterprises (SMEs) account for over 90 per cent of the nearly 300,000 enterprises nationwide, use 45-50 per cent of the country’s labour force, produce more than 40 per cent of consumer goods, and contribute more than 30 per cent of the State’s budget.

So, these kinds of enterprises play a very important role in the country’s economy.

The number of SMEs has quickly risen since the Government encouraged the establishment of private enterprises.

Because these enterprises expanded so quickly, human resource training as well as the capacity of management at these enterprises have yet to develop.

Can you speak clearly about the problems facing SMEs?

Currently, SMEs are faced with four problems including capital, vocational training, business experience and equality.

SMEs have a great demand for capital for their production and trading activities. However, bank loans are currently very difficult to obtain.

Regarding vocational training, due to the lack of a system for vocational training, the number of trained labourers in SMEs accounts for only 23 per cent.

Meanwhile, the majority of the labour force in SMEs lacks experience in production, trade as well as a general understanding of the market, and information technology.

Furthermore, SMEs are not being provided bank incentives because many of them haven’t met regulations on their mortgages and guarantees.

At present, a large proportion of labourers are at high risk of unemployment.

How do you think we should solve the problem?

This is a big problem as only 20 per cent of SMEs can stand up to current market conditions, while 60 per cent are severely impacted by the challenges we’ve discussed, and the remaining 20 per cent will be forced to shut down production and shift to another sector.

I think bankruptcy or the breaking up of firms are unavoidable in a market economy and we must accept that fact.

Several people say it’s now the time for the Government to loosen monetary policy in order to reduce SMEs’ financial difficulties and speed up the economic growth. As Deputy Chairman of the Consulting Council for National Monetary Policy, what do you think of such a policy?

In 2008, the overall difficulties of Viet Nam’s economy has hurt SMEs.

Capital shortages are the biggest challenges facing SMEs. In the past, SMEs got easy access to bank loans. This year, the Government applied a policy to tighten credit, which caused several SMEs to fall into dire circumstances.

SMEs can only overcome these challenges if they have the Government’s support both in capital and administrative policy.

In the current capital shortage situation, SMEs should focus their investment in specific fields, avoid spreading investment in multiple sectors, and carefully consider newly established projects.

The recent economic situation proves that the Government’s measures on fighting inflation have had good impacts on the economy. The interest and foreign exchange rates have decreased, banks’ liquidity capacity has improved, the rise in consumer price index has slowed down, and more. These are positive signals.

However, I think that this is not the right time to loosen monetary policy because now we cannot make any comment on how the Government will adjust regulations on mortgages, lending terms, and others.

Source: Viet Nam News